Ddev Plastiks share price jumps 130% in three months; should you buy, sell or hold?

Ddev Plastiks share price has been on a tear over the previous three months, with gains of over 130%. Ddev Plastiks share price has risen by 70% since its Q4 results on May 20. In Q4 FY24, DDev Plastiks Industries Ltd's net profit increased by 27.42% over the same time the previous year, reaching ₹61.53 crore. In the fourth quarter of 2023-2024, the company's revenue declined 10.49% from the same time prior year, to ₹605.22 crore. 

"We achieved a remarkable 52% EBITDA growth yoy expanding the margin to 12% in FY24; this has been the first year post the de-merger we were able to record a double-digit EBITDA margin and aim to sustain it in the coming years as well. In the current fiscal net profit grew substantially by 75% to ₹182 crore, solidifying our strong financial performance," said Narrindra Suranna, Chairman and Managing Director of the company. 

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Following the Q4 results, domestic brokerage PhillipCapital India lifted the target price to ₹334 from ₹321 before; nevertheless, Ddev Plastiks Industries share price has surpassed this level in over 20 days, trading at ₹384.70 per share on the BSE. The brokerage maintained ‘buy’ rating for the stock.  As of Q4FY24, the firm is net debt-free. They now have working capital debt of ₹66 crore.

On Thursday's session, Ddev Plastiks Industries share price opened at ₹388.50 apiece on BSE, the stock touched an intaday high of ₹391.95, and an intraday low of ₹375. Ddev Plastiks share price has gained 158% in one year. 

“Ddev Plastiks share price has seen a sharp surge in price post its Q4 results announcement. It is trading firmly above all the major moving averages and all the momentum indicators are showing that it is trading in an overbought zone. It is advisable that once should wait for a dip till 330 levels for initiating fresh longs and for existing positions one should hold with a stop at 355,” said Dr. Ravi Singh, SVP - Retail Research at Religare Broking Ltd.

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Regarding the company's prognosis, the brokerage claimed in its research that Ddev Plastiks Industries serves as a proxy for the wire and cable business. The Indian wire and cable market is expected to increase at a 12.5% CAGR from FY23 to FY27, providing significant industry tailwinds for cable compound makers such as Ddev. They have constantly improved their margins by gradually shifting their product mix to value-added areas and introducing new goods such as Halogen Free Fire Retardant (HFFR).

“The management continues to focus on product development of higher voltage rating compounds that will fetch them better margins. We believe that any significant improvement in margins will be visible in FY26 and onwards post the capex,” brokerage PhillipCapital India said. 

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Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.